Topline
Elon Musk’s latest multibillion-dollar unloading of Tesla shares brings his total sales in stock of the automaker he leads as CEO to over $20 billion since he bought Twitter in April, as he continues to focus his time and resources on the social media platform, much to the dismay of Tesla investors.
Things are not A-OK with Tesla’s stock price.
Key Facts
Musk sold about $3.6 billion in Tesla shares between Monday and Wednesday, according to Securities and Exchange Commission filings.
He’s now sold $22.93 billion in Tesla stock over four separate selloff rounds beginning April 26, a day after he agreed to take over Twitter at a $44 billion valuation.
And Tesla shares have tanked ever since, declining 59% in the period, compared to a 13% dip for the S&P 500.
Tesla has now lost $705 billion in market capitalization since Musk first disclosed he took a 9% stake in Twitter on April 4, declining from $1.2 trillion to $495 billion.
Crucial Quote
“The Twitter nightmare continues as Musk uses Tesla as his own ATM machine to keep funding the red ink at Twitter,” Wedbush analysts Dan Ives and John Katsingris wrote in a Thursday note to clients, referring to Twitter’s struggles to keep advertisers on the site. “Musk has managed to change the narrative of Tesla from the fundamental [electric vehicle] transformation story” to a story of Tesla funding Twitter, “which we believe will go down as the most overpaid tech acquisition in the history of M&A and remains a train wreck situation.”
Forbes Valuation
Musk is worth $174 billion, according to our estimates, making him the second-wealthiest person on the planet. His net worth peaked at over $320 billion last year, and his year-long reign as the world’s richest person ended earlier this month following the latest decline in Tesla share prices.
Key Background
The long-time CEO of Tesla and the private aerospace and communications firm SpaceX, Musk added another CEO feather to his cap in late October following the completion of his takeover of Twitter. Musk has dedicated much of his time since to molding Twitter to his liking, firing most of the company’s top executives and a majority of its employees. A self-proclaimed “free speech absolutist,” Musk has eliminated most content moderation controls at Twitter and overseen the reinstatement of numerous banned accounts, mostly owned by individuals with far-right politics. A flurry of advertisers have fled Twitter due to uncertainty about content moderation despite Musk’s public pleas to convince them to stay, calling into question how Twitter can improve its bottom line, considering ad revenue accounted for over 90% of total revenue before the company went private.
Further Reading
Musk Sells Nearly $3.6 Billion In Tesla Stock—Moves Further Away From Richest Person Title (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2022/12/15/elon-musk-has-now-sold-229-billion-in-tesla-shares-since-buying-twitter-and-dragged-down-teslas-market-cap-by-700-billion-in-the-process/